Personal Finance and Budgeting
Income is the consumption and savings opportunity gained by an entity within a specified timeframe, which is generally expressed in monetary terms. However, for households and individuals, "income is the sum of all the wages, salaries, profits, interests payments, rents, and other forms of earnings received... in a given period of time.
In the field of public economics, the term may refer to the accumulation of both monetary and non-monetary consumption ability, with the former (monetary) being used as a proxy for total income
In common usage, an expense or expenditure is an outflow of money to another person or group to pay for an item or service, or for a category of costs. For a tenant, rent is an expense. For students or parents, tuition is an expense. Buying food, clothing, furniture or an automobile is often referred to as an expense. An expense is a cost that is "paid" or "remitted", usually in exchange for something of value. Something that seems to cost a great deal is "expensive". Something that seems to cost little is "inexpensive". "Expenses of the table" are expenses of dining, refreshments, a feast, etc.
In accounting, expense has a very specific meaning. It is an outflow of cash or other valuable assets from a person or company to another person or company. This outflow of cash is generally one side of a trade for products or services that have equal or better current or future value to the buyer than to the seller. Technically, an expense is an event in which an asset is used up or a liability is incurred. In terms of the accounting equation, expenses reduce owners' equity. The International Accounting Standards Board defines expenses as...decreases in economic benefits during the accounting period in the form of outflows or depletions of assets or incurrences of liabilities that result in decreases in equity, other than those relating to distributions to equity participants.
Debt refers to something that is owed or due either physically or metaphorically. In the physical sense, the parties to debt are lenders (those who give) and borrowers (those who receive). In the metaphorical sense, debt refers to a moral obligation not based on physical value (e.g.: debt of gratitude).
Debt was the first form of commerce (barter system) documented in human history and existed about 2,900 years prior to the invention of coinage. Today there are many examples oflenders of monetary debt that include sovereign nations, banks, credit card companies, payday loan providers, individuals, etc., who in many instances subject their borrowers to contractual terms that designate the amount and timing of repayments of the debt and that frequently include the payment of principal and interest.
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